Taxman gets bumper haul in January
January is a cruel month in lots of ways, not least because it’s the time HMRC collects the bulk of its taxes.
This year saw a particularly bumper haul for the UK tax authorities, with rises across income tax, capital gains tax and VAT. Income tax hit £28,756m, capital gains tax was £6,756m, while VAT sat at £13,701m.
This represents a 10% rise in income tax over the same point in 2018. Rates haven’t risen, but there are now more people in employment and wages have risen, which has pushed up the overall amount raised.
Capital gains tax is up 21%, with both the UK housing market and global stock markets buoyant. At the same time, lower rates have encouraged people to realise gains. Only VAT fell, moving slightly lower to £13,795m to £13,701m.
Rising tax bills
Over the past five years, the income tax bill has risen 15%, VAT 20%, stamp duty 39%, capital gains tax 99% and inheritance tax 53%.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “One of the many things that’s hard to like about the taxman is the fact that January is the peak of his year. Every January, as we face the misery of tax returns and a spending hangover, the taxman hits the January jackpot. This January has put even more of a smile on his face, because the income and capital gains tax take has ticked up significantly.
“Buoyant stock markets through 2017 probably helped bolster capital gains tax receipts. The taxman is also cashing in on fiscal drag, because the more our wages rise, the more tax we’ll pay on them, and the more of our income falls into higher or additional rate tax brackets.”